Strong commercial real estate market continues from 2000

While gloomy reports filter in from other areas of the country, the outlook for commercial real estate in southwest Missouri is good, according to professionals in the local marketplace.

"We're experiencing a vibrant market right now, which is actually a carry-over of last year," said Ken Schwab, commercial real estate agent for Wilhoit Properties.

Steve Coller, president of Commercial Property Group, agreed. "The outlook looks real good to me," he said.

"Local construction activity has held its own, with a good mix of different kinds of products. And the leasing demand is still out there, with several concerns looking for space to rent and with many local business tenants showing a need for expansion or refining of their space needs. Our local economy is holding its own, and I look for 2001 to be better than 2000," Coller said.

Schwab said, "We have uniquely strong retail trade here. This is a hub secondary market. When the primary market becomes saturated, we have businesses seeking us out as their secondary market. And because our growth has been occurring at the same time as their need, we have not been affected at all in a negative way."

Both men see a local marketplace relatively untouched by the weather conditions, economic upheavals and fuel price hikes that captured the headlines at the onset of this year.

"I think we saw some slowdown in excavation and site work because of the earlier weather conditions," Coller said, "but nothing that has delayed any of the projects in a major way. The same with the natural gas and gasoline prices. We saw only a modest and very temporary increase in charges."

Schwab said, "There was a period of time in winter when things were jumpy, right after the election when we didn't know who won the election, the snowstorm; and the stock market variations. For that period of time, I'd say there was a little bit of uncertainty, but the interest rate drops encouraged people to be optimistic."

Schwab indicated that of the three commercial real estate sectors (retail, office and industrial warehouse) the retail shopping venue appears to have been the most active over the past year and continues to be so, at least for Wilhoit.

He cited at least four major Wilhoit projects under way all focusing on the continued demand for retail space. These projects on completion will open up over 100,000 square feet of retail space.

Wilhoit's major commercial real estate projects now under way include Battlefield Towers at Lone Pine and Battlefield and the French Quarter retail strip along Republic Road near Fremont.

Both are scheduled for completion early this summer.

Also under way by Wilhoit is a project on Kingsley to be completed by mid-summer and the Golden Hills project on the north side of town which was completed late last year and is now ready for occupancy.

Coller, on the other hand, said he is seeing some variety in new commercial real estate activity around Springfield including a 65,000-square-foot office building project (having just broken ground) at Bennett and Kansas Expressway; and office and condo construction activity underway at Sunshine and Highway 65.

"There's a good mix of different kinds of products," Coller said. "There's retail space at Kansas and Battlefield; Chesterfield Village is almost full-out with its office space; and we're seeing medical office space along Primrose."

As far as specific locations of commercial real estate growth, Schwab said most of the development is in the south, which is already established as a strong retail area. The area of Kansas and Kearney up to Interstate 44 is an area getting a lot of attention as a new "pocket of strong retail."

Coller, a 14-year veteran in the commercial real estate field, said he sees the entire Kansas Expressway corridor as a focal point of new growth, as well as the continuing regeneration of Kearney street.

"The extension of the James River freeway to I-44 will spur Greene County growth," he said, adding, "and the last leg of completion of 65 to Branson will make that area more appealing to outsiders."

Both men earmarked the city's new industrial park to generate growth in other areas of commercial real estate. The park borders the Springfield-Branson Regional Airport in the west part of town.

"I think you're going to see other developers focus on that area once the industrial park nears completion and occupancy," Schwab said.

"There'll be more businesses and more people in that area. Large manufacturers will bring in more people; and there will be a need for more service businesses to accommodate the labor force and the increased number of people in that area. We haven't seen that happen yet, but I believe we can fully expect to see it," he said.

Coller said he expected to see the Jordan Valley Park project boost the downtown market with renovations and public improvements in anticipation of increased public interest.

Coller said he views the local market as healthy.

"The last time we saw any slowdown was in the early '80s. All of the '90s on through the present have been pretty consistent," Coller said.

Even in light of the temporary period of "uncertainty" at the beginning of this year, Schwab said he saw no direct relationship or impact on the stability of the local commercial real estate market.

Schwab, who has been in the commercial real estate business for 20 years, gave this explanation for that stability: "We have two primary factors at play. We have a very diversified work force here; and we're a conservative bunch.

"Both the financial institutions and the developers tend to make more conservative decisions. The more speculation, the more unstable the marketplace. We have a good appreciation of that, which in turn creates our underlying stability. We have a sturdy and vibrant market now and I see nothing on the horizon that would indicate any change or difference."